Jan 25

Goetz Fitzpatrick Wins Major Trade Case in ITC Against China

Attorney Donald R. Dinan recently won a major trade case before the U.S. International Trade Commission (“ITC”) on the importation of self-anchoring beverage containers into the United States against China under section 337 of the Tariff Act of 1930. Section 337, one of the country’s major trade laws, which is administered by the ITC, prohibits unfair trade acts and unfair methods of competition in the importation of goods into the United States. Penalties include exclusion of the offending goods from the United States which is enforced at the border by Customs and Border Protection (“CBP”).

Goetz represented Mighty Mug, Inc., Rahway, New Jersey which holds the patents on beverage containers which have a self-anchoring patented device on the bottom of the containers which adheres to the surface, desk, table, etc., the container is placed on preventing it from being accidentally knocked over, but which lifts effortlessly when picked up by the user. Containers included coffee mugs, glasses, stemware and the like. The coffee mugs are known popularly by their tradename “Mighty Mug” and have been featured nationwide on television including on the Today Show. The Mighty Mug has been one of the most popular gift products in the United States for over three years.

International patent infringement is an unfair act and unfair method of competition under section 337. As the product became extremely successful, Mighty Mug began to notice a flood of infringing mugs coming into the United States from China. The products were “knock-offs” – identical to the patented Mighty Mug; exact copies – and were being sold at half the price. They were sold on Amazon, eBay and telecommercials often under shadowy and untraceable names. Addresses listed for the Chinese companies exporting the infringing goods often were vacant lots, store fronts which were headquarters for hundreds of companies, and in one case an apartment unit where the door was answered by an elderly woman who lived there. Investigators under the direction of Mr. Dinan were able, however, to track down many of the infringing companies in order to bring a trade case.

Mighty Mug filed a complaint with the ITC under section 337 alleging patent infringement in the importation of goods from China. After a full investigation, the ITC found that Mighty Mug’s patents were infringed by imports from China in violation of section 337, and issued a general exclusion order. General exclusion orders prohibit the importation of the infringing goods into the United States by anyone from any source, thus prohibiting evasion of circumvention by persons simply by changing the name of the importer or even the country of origin. The infringing imports were eliminated from the market, and Mighty Mug’s market position was restored.

At the conclusion of the investigation, Mr. Dinan stated that section 337 can be extremely efficient in protecting American companies from low price infringing imports from China and elsewhere, and should be seriously considered by anyone suffering from this type of illegal and unfair trade. “The General Exclusion Order which runs against the world and prohibits importation of the infringing goods from anywhere, enforced by agents with guns and badges at the border, can be a very effective weapon,” said Mr. Dinan

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